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August 6, 2012

Warren Buffett Drops Consumer Stocks, Buys Into Banks

Berkshire Hathaway was a net seller of stocks in Q2, boosting cash 7.5% to $40.7 billion

Over the quarter, the billionaire investor’s company was a net seller of $1.2 billion of equities. (Photo: AP)

Berkshire Hathaway (BRK/A) Chairman Warren Buffett backed away from stocks in the second quarter of 2012, reducing the company’s holdings in consumer-products equities but investing more heavily in the finance sector.

Over the quarter, the billionaire investor’s company was a net seller of $1.2 billion of equities, buying $1.8 billion in stocks but selling $3 billion, according to Berkshire’s Q2 report filed on Friday with the SEC. Cash, meanwhile, was boosted a hefty 7.5% to $40.7 billion.

“Berkshire was a net seller of equities in the quarter as it cut its allocation to companies that make and distribute consumer goods while boosting holdings of financial firms and a group called ‘commercial, industrial and other,’” Bloomberg reported Monday.

Individual stocks were not listed in the filing, however. Berkshire’s Q2 purchases will be reported in about two weeks.

But the Bloomberg story notes that Buffett has cited challenges at consumer-products firms, including Johnson & Johnson, Procter & Gamble and Kraft Foods.

In the first quarter, Berkshire was a buyer of Wells Fargo and Bank of New York Mellon as well as Wal-Mart and General Motors, GuruFocus reported.

Berkshire Hathaway’s profits stood at $3.1 billion as of June 30, compared with $3.4 billion a year ago. Profits for the first half of 2012 rose, however, to $6.4 billion compared with $4.9 billion in the first half of 2011.